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Pre Action Protocol for Construction and Engineering Disputes.

January 12, 2012

Pre Action Protocol for Construction and Engineering Disputes:

The Pre Action Protocol for Construction and Engineering Disputes applies to all construction and engineering disputes (including professional negligence claims against engineers, architects and quantity surveyors) The protocol will not apply if proceedings are for the enforcement of the decision of an adjudicator pursuant to various acts or a claim for injunctive relief, summary judgment application pursuant to Part 24 of the CPR or for claims which relate to the same or substantively the same issues that have been subject to a recent adjudication under the 1996 Act.

Objectives:

The objective of the Pre Action Protocol for Construction and Engineering Disputes is to achieve an early settlement as with the other protocols and to provide for the early exchange of information about the claim.

Failure to comply again as with other protocols may result in a penalty from the court in the form of costs.

Letter of Claim:

  • Prior to the commencement of proceedings the claimant will send to the defendant a letter of claim.
  • The protocol details the information that needs to be included
  • Claimants full name and address;
  • Name and address of each of the proposed defendant;
  • Summary of the facts of the claim and the facts on which each claim is made;
  • Basis of the claim identifying contractual terms and statutory provisions relied on;
  • The relief claimed;
  • Damages claimed and a breakdown of how they have been quantified;
  • Where a claim has been made previously and has been rejected by a defendant and the claimant is able to identify the reason for its rejection, the claimant’s grounds for his belief as to why the claim was wrongly rejected;
  • The names of any experts already instructed by the claimant and any other evidence you intend to rely on;

The defendant’s response:

The defendant has to acknowledge the letter of claim within 14 days of receipt. If there is no acknowledgment then it is open to you to issue proceedings without further compliance with the protocol.

Objection to the courts jurisdiction:

If the defendant is to take objection to all or part of your claim on the grounds that

  • the court lacks jurisdiction
  • The matter should be referred to arbitration or
  • the defendant named in the letter of claim is the wrong party.

That objection should be raised by your opponent within 28 days after the receipt of the letter of claim.

The letter of objection should specify the parts of the claim each objection relates and the grounds relied on, identify the correct defendant. A failure to raise at this time does not prejudice the defendants right to raise at a later date although there maybe some penalisation by the court in cost.

If such an objection is given the defendant is not then required to send a letter of response.

If at any stage before proceedings the defendant withdraws his objections, the remaining parts of the protocol and compliance which are detailed later will have to be complied with.

Defendants Letter of Response:

Within 28 days of receipt of the letter of claim or any extended period, the parties agree, the defendant will send a letter of response to the claimant.

The response must contain the following information:

  • Facts that are detailed in the letter of claim which are agreed or not agreed and if they are not agreed the basis for disagreement
  • The claims that are accepted and rejected and the basis of rejection;
  • If a claim is accepted in whole or part whether the damages sums or an extension of time when these are to be accepted or rejected. If they are to be rejected the defendant must detail the reasons for there rejection;
  • If contributory negligence is alleged then the facts need to be referred to;
  • If the defendant intends to make a counterclaim information has to be provided as to that regard;
  • The names of any experts instructed;
  • Any evidence the defendant intends to rely on and to what issues that evidence will be directed;

If no response is received by the defendant within the 28 days and no acknowledgment has been provided previously then this entitles the claimant to disregard the protocol and issue proceedings.

Claimants Response to Counterclaim:

The claimant is required to provide any response to any counterclaim within the equivalent period allowed to the defendant to respond to the letter of claim which is 28 days.

Pre Action Meeting:

Within 28 days after the defendants letter of response or the further extension if the claimant responds to any counterclaim parties should meet.

The aim of that meeting is to agree the main issues between the parties, to agree the disagreement between the parties in respect to each issue and to consider how those issues might be resolved without the recourse to litigation.

It might be necessary to have more than one meeting. The court expects to be present the individuals involved, or if it’s a company a representative of the company who has authority to settle, a legal representative of each party, representative from the insurers if involved and any other parties to the litigation.

The parties should consider whether any Alternative Dispute Resolution (ADR) should be considered to try and attempt to settle the claim.

If the parties cannot agree to settle the dispute without the need for litigation then they should at least use “their best endeavours” to agree:

  • If any expert evidence is likely to be required to define the relevant issues and if the expert evidence is dealt with including whether the appointment of a joint expert is necessary;
  • The extent of disclosure of documents with a view to saving costs;
  • How to conduct the litigation again with a view to minimising costs and delay;

It should be kept in mind that any party that attends such a pre action meeting, should be at liberty and may disclose to the court that:

  • That the meeting took place, when and who attended;
  • The identities of the parties who refused to attend and their reasons for their refusal to attend;
  • If the meeting did not take place, why not;
  • Any agreement agreed between the parties;
  • Whether any alternative means of resolving the dispute where considered or agreed;

This should be kept in mind as again there may well be cost consequences.

Limitation:

If by complying with the protocol the claimants claim may become time barred under the Limitation Act then the parties are able to commence proceedings and then comply with the protocol in order to protect their position.

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